Walgreen to buy USA Drug chain, gain 144 stores
Walgreen Co. said it is acquiring a regional drugstore chain in a $438-million, mostly stock deal that would give the company a larger presence in the mid-Southern United States.
The deal for USA Drug involves 144 drugstores under the names USA Drug, Super D Drug, May’s Drug, Med-X and Drug Warehouse. The stores are located in seven states including Arkansas, Kansas, Missouri and Oklahoma. Sales for the chain totaled $825 million in 2011.
The chain is owned by Stephen L. LaFrance Holdings Inc. and members of the LaFrance family. Walgreen will acquire the chain largely through a stock purchase in the holding company.
Walgreen said Thursday that it expects the transaction to close around Sept. 1.
The acquired drugstores will operate under their current brand names “in the near term” after the deal closes. Walgreen said that “decisions will be made over time” about how to “harmonize” the brands.
The Deerfield, Ill., company said it does not expect the deal to be reflected materially in earnings during the current fiscal year that ends Aug. 31.
Walgreen also is trying to develop a presence abroad, buying a 45% stake in European pharmaceutical giant Alliance Boots last month for $6.7 billion.
The string of deals comes as Walgreen tries to boost its sales. It said Thursday that revenue fell 6.8% in June to $5.6 billion from $6 billion a year earlier amid declining customer traffic and an increase in generic drugs.
As of June 30, Walgreen operated 8,359 locations in the U.S., including Puerto Rico and Guam. On Thursday, the company’s stock rose 26 cents to $29.87.
Wong reported from Chicago, Hsu from Los Angeles
